According to feedback from cotton trading companies in Qingdao, Zhangjiagang and other places, the total bonded + non-bonded cotton inventory in China’s major ports has continued to show a slight downward trend since late December. It has not stopped falling and stabilized, but compared with US cotton, West Africa and other producing areas Compared with the continuous decrease in cotton stocks, Brazilian cotton port stocks have rebounded slightly recently, and Indian cotton stocks have finally stopped increasing and falling.
A cotton import company in Qingdao said that there are three main reasons for the rebound in Brazilian cotton stocks at the port: First, the quantity of Brazilian cotton shipped in September/10/November for 2020/21 is slightly larger than that of U.S. cotton and cotton from other origins (part of which is Santos Port Resources that have been blocked and delayed shipments) have recently been concentrated in ports and warehouses; secondly, for more than half a month, the quotations of bonded and customs-cleared Brazilian cotton at the port have been the same as or even inverted compared to US cotton of the same quality and grade, and the competitiveness has declined. Third, the 2020/21 Brazilian cotton processed in the middle and late stages has a high lint rate and average or poor uniformity. The quality differences between different origins, processing periods and different batches are relatively large. Cotton spinning mills and middlemen have shifted their inquiry/purchasing focus. 2021/22 US cotton.
Judging from surveys and estimates by some foreign investors and cotton trading companies, as of mid-January, foreign cotton stocks at ports may have dropped to 230,000-250,000 tons, of which Indian cotton is expected to account for close to 40%. Some cotton merchants judge that since the US cotton loading period in 2021/22 is concentrated in January/February/March, the shipment period of Brazilian and African cotton has also been delayed to January/March. In addition, the main ICE contract has reached a ten-year high of 118.99 Cents/pound, the trend of funds testing 120 cents/pound has formed. Foreign cotton transactions and shipments at ports will continue to be deserted around the Spring Festival, and it is difficult to turn around. Therefore, cotton stocks at ports may gradually stop falling and rebound around mid-February.
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